A Short Term Outlook: XAU/USD (Gold); July 25, 2022

A Short Term Outlook: XAU/USD (Gold)

Today’s U.S. Session is totally empty as no key Fundamentals have scheduled to release during U.S. session. Traders eye U.S. FOMC Meeting due on Wednesday to decide the further directions of the U.S. dollar. Investors expect that the U.S. Central Bank will raise interest rates by another 75 basis points or 100 bps in most aggressive scenario to support greenback.

Last Friday, preliminary data from S&P Global Market Intelligence shows that activity in the U.S. manufacturing and service sectors dropped to their lowest level in two years. Gold has started recovering as Global recession fears are resetting rate hiking expectations for all the major Central Banks.

Now again gold is starting to act like a safe haven as weakening economic growth will force many Central Banks to abandon their aggressive tightening plans. Last week Bank of America too released supportive statement that they see the U.S. falling into a mild recession by the end of the year. On the contradict side, some analysts have said that the Federal Reserve could be closer to the end of its tightening cycle, which will be outright bullish for gold. The further journey for gold will be bumpy only as faces strong resistance around $1,752 mark.

Technical View:

XAU/USD (Gold):

  • Gold remains highly volatile on Monday and currently stabilizes below $1,730 mark.
  • The pair made intraday high at $1,736 and Low at $1,720 mark.
  • A day chart is down and H1 chart with triple EMA suggests up trend for the time being.
  • A sustained close above $1,738 on H1 chart requires for the upside rally.
  • Alternatively, a consistent close below $1,720 on H1 chart will test further supports.
Supports Resistances
$1,718 $1,738
$1,712 $1,742
$1,708 $1,748
$1,702 $1,752
$1,696 $1,757

Take a look and do trade wisely!
Good Luck